As electronics companies look for cheaper labor, many are moving their production facilities to Vietnam. Electronics production has grown so quickly that in only 2 years, electronic component exports now surpass all others including textiles, oil and footwear. And this is just the beginning.
Foreign direct investment has facilitated greater production of mobile phones and components. Samsung, which has made huge strides in the country, saw its export value double to $12.7 billion in 2012.
Deputy Prime Minister, Nguyen Thien Nhan, speaking at the 18th Annual World Electronics Forum, said that Vietnam hopes to reach $40 billion in electronics exports by 2017, up from nearly $20 billion in 2012. Electronics exports accounted for 23% of all exports through the first five months of 2013.
But as electronic component exports gain market share, there are numerous challenges that must be addressed. According to Xinhuan,
“Although the sector's export value is high, 90 percent of which was recorded by the foreign direct investment ( FDI) sector while the remaining 10 percent by domestic companies. That required international support in market expansion, human resource training, competitiveness increase and cooperation for development of the support industries and participation in the global value chain, said the VEIA official.”
JP Morgan economists created the chart below to illustrate the growth of Vietnamese electronics exports:
[Quartz]
